July 17, 2014

TREAT IT LIKE THE COMMODITY IT IS AND PRICES FALL:

Health economists here are puzzling over the precise causes of the current slowdown. But they largely agree on a few factors.

The economic crisis drove down demand for new medical services, as people lost their jobs and coverage, or simply decided to put off elective procedures like knee replacements. Tougher times also led to policy tightening by federal and state officials -- and employers, who have increasingly moved from generous health insurance plans to those that expose their workers to more out-of-pocket costs.

The Affordable Care Act, also known as Obamacare, expands coverage to new people, but over the last few years, it has also cut back on spending in Medicare, much of it from lower reimbursements to hospitals and insurers. The law also includes attempts to make the medical system more efficient by reducing forms of care that do not make people healthier.